Banks, asset managers, insurers and pension trustees will be required to make climate-related financial disclosures no later than 2025, according to a new sustainability initiative jointly launched by Hong Kong’s top regulators. 

In addition to new rules, a ‘Green and Sustainable Finance Cross-Agency Steering Group’, which includes the Securities and Futures Commission and the Hong Kong Monetary Authority as participants, was also formed to further Hong Kong’s climate change ambitions, according to a statement. 

Locally, the steering group will also look to increase the coverage of mandatory disclosure and aim to adopt a common taxonomy from a group co-led by China and the E.U. will supposedly be introduced by mid-2021.

Global Strategy

Globally, the steering group will focus on a wide variety of areas including the development and maintenance of a sustainability reporting standard, promotion of climate-focused scenario analysis and the establishment of a platform for cross-sectoral activities. 

The steering group has developed a strategic plan with six key areas of focus: climate-related financial risk management; flow of climate-related information at all levels; enhancing capacity building for the sector and raising public awareness; facilitate capital flows towards green and sustainable causes; capitalizing on Greater Bay Area opportunities; and strengthening regional and international collaboration.

«The steering group recognizes the need and the urgency to tackle climate and environmental risk and transition to a more sustainable economy,» said Eddie Yue, co-chair of the steering group and HKMA chief executive. «Finance is key to driving that change. We hope that the industry will work with us to take this forward.»

Carbon Neutral Target: 2050

According to the statement, Hong Kong’s financial center will aim to achieve carbon neutrality by 2050 while mobilizing more capital towards sustainability.

«The private sector undoubtedly has a vital role to play in directing capital to activities which lower carbon emissions over time, and our plan is directed to mobilizing significant volumes of private investment,» said Ashley Alder, co-chair of the steering group and SFC CEO.

«Hong Kong’s plan will also have a major impact globally; the extremely large footprint and international significance of Hong Kong’s HK$ 45.7 trillion capital markets means that they will play a critical role in the overall effort to reach net-zero goals.»